Ripple, the issuer of XRP, is making strides in the stablecoin arena following CEO Brad Garlinghouse’s hints at the concept during Consensus 2024. The company has initiated development on a fiat-pegged token named Ripple USD, or RLUSD, targeting the substantial $160 billion stablecoin market, which is primarily led by Tether (USDT).
Ripple has announced that private beta testing has commenced on both XRP’s ledger and the Ethereum mainnet, the second-largest blockchain by market capitalization. At Consensus 2024, Garlinghouse highlighted the potential of the stablecoin sector, suggesting it could expand into a $3 trillion industry by 2030. Additionally, Ripple’s president, Monica Long, indicated that the launch of the stablecoin is anticipated this year.
In an announcement made on August 9, Ripple revealed that RLUSD will function as a U.S. dollar-backed token at a 1:1 ratio. The company plans to secure reserves using cash deposits, treasuries, and cash equivalents. To enhance transparency, Ripple committed to providing monthly attestations and engaging a third-party accounting firm for audits, signaling a proactive approach toward regulatory compliance and approval.
Entering the stablecoin market puts Ripple in direct competition with established players like Tether and Circle’s USD Coin (USDC). However, Garlinghouse emphasized that there is sufficient space for all participants to thrive. Circle has already shown its capacity to adhere to stringent stablecoin regulations in Europe and is on the verge of an initial public offering in the United States, potentially becoming the first stablecoin firm to publicly list its shares.
U.S. lawmakers are currently evaluating stablecoin regulations that could pave the way for banks to engage in this space. Legislators such as Patrick McHenry and Maxine Waters are reportedly making headway toward such legislation.